GARP - GARP Risk Index

GARP Risk Index

The GARP Risk Index is a quarterly gauge of global perception of the risk factors affecting the U.S. economy.

Key findings:

The Risk Index reversed course in Q4, declining more than 6 points as US systemic risk fears waned sharply; at 110.41 the Risk Index is now equal to the level reached in Q2.
Optimism that European leaders have made progress on a unified approach to resolve the debt crisis helped allay fears that a repeat of the 2008 financial crisis is imminent. An uptick in market confidence triggered a steady decline in market volatility and a strong rally in global equity markets throughout Q4.
Hints of economic recovery in the US, combined with relief that odds of a global double-dip recession may now be lower, triggered a sharp decline in risk perceptions associated with several key US macro-economic indicators.
Despite signs of optimism, global risk professionals remain wary of Eurozone instability, US monetary and fiscal policy initiatives, and geopolitical risk when looking ahead to factors that will influence US systemic risk in 2012.